AMD hints at pro-grade graphics push
October 21, 2013 // 9:30 a.m.
AMD has pledged to better compete with rival Nvidia in the professional-grade graphics market, using its more secure financial position to launch new products and steal market share.
AMD has struggled in recent years, losing considerable ground to rival Intel in the server and workstation markets. Although its clever accelerated processing unit (APU) designs have helped it to gain market share in low-end laptop and desktop units, it does so on razor-thin margins - leading to stop-gap measures like the sale and leaseback of its headquarters.
Over the past year, however, the company has been promising a comeback - and the first signs of that appeared in its most recent earnings call, when income from its freshly-launched semi-custom processor division pushed it into an unexpected profit. Responsible for the chips in both the Xbox One and PlayStation 4 next-generation consoles, AMD's semi-custom division is one of the company's biggest gambles in years - and appears, if these early results are any indication, to be paying off already.
In the most recent call, the company showed a net profit for the quarter of $48 million - a distinct difference from the $157 million loss it made in the same quarter last year. Revenue sat at around $1.46 billion compared to $1.27 billion over the same period last year, despite a drop of 15 per cent in traditional client-PC chip sales that saw the Computing Solutions division drop to $790 million income from $927 million last year.
While chief executive Rory Read promised investors that it had no intention of leaving the shrinking PC CPU market - 'It’s a competitive space [but] we are going to be in there and we are going to compete because we have a very good product,' he claimed during the most recent earnings call - the company has another target in its sights: professional graphics.
Although both AMD and Nvidia offer pro-grade graphics hardware for workstation use, the latter has an overwhelming majority share: according to figures compiled by industry watcher Jon Peddie Research, Nvidia holds 81 per cent of the workstation graphics market while AMD has just 18 per cent, and the remaining one per cent belonging to 'others.'
That's something AMD is looking to change, and while it had no official announcements to make Read dropped heavy hints that new and more powerful workstation hardware is incoming. 'We delivered our fifth consecutive quarter of revenue and share growth in the professional graphics area,' said Read. 'We believe we can continue to gain share in this lucrative part of the GPU market, based on our product portfolio, design wins in-flight, and enhanced channel programs.'
Sadly, Read would not be pushed on exactly what those 'in-flight' design wins may be, but it was enough to get analysts' attention. 'After years of neglect, AMD's workstation group, under the tutelage of Matt Skyner, has the backing and commitment of top management and AMD intends to push into the market aggressively,' claimed Jon Peddie. 'We have seen them gain market share this year and expect them to gain even more [next year.]'